Thought you might find this interesting.Originally Posted by johan
China Not A Big Tech Innovator, But It's Spending A Lot On R&D Doug Tsuruoka
Mon Jul 25, 7:00 PM ET
The next time you hear a prediction that China's economy will conquer the world, consider what may be that nation's Achilles' heel: technology innovation.
South Korea is making strides in human cloning. Japan created Walkmans and videocams.
China has yet to score in breakthrough tech. The U.S. still trumps everyone in tech innovation, with its cutting edge research in IT, space technology, defense and other fields.
This doesn't mean China won't someday be a tech powerhouse. But a point to remember is that despite its huge manufacturing base and markets, some experts say China lacks the high-end R&D that's a key to any advanced nation's economic success.
"You still have the legacy of a Soviet style, state-led technology development system. Chinese companies are starting from a very low tech base...They are nowhere near the U.S. or Japan in terms of technology innovation," said Roger Cliff, a political scientist for think tank Rand Corp.
Beijing Spending Billions
China's government is pouring billions into its Academy of Sciences agency and state-owned firms to close its R&D gap. But before anyone assumes China threatens U.S. technology supremacy, one should consider the case of Japan in the 1980s.
At the time, the U.S. media was filled with stories about Japan's so-called Fifth Generation Computer Project. This was a government program to build robots and computers that could think and act like humans. The Japanese also were working on a jetliner that could compete with Boeing (NYSE:BA - News). Fujitsu (Other OTC:FJTSY.PK - News) and other Japanese DRAM chipmakers were jockeying to drive U.S. rivals out of the market. There was talk of a Japanese space station.
Some pundits warned that Japanese technology was about to clobber the U.S.
Twenty years later, Japan's Fifth Generation project is a complete failure. It was a victim of poor funding. Plans for a Japanese airliner never got off the ground. Designers found it hard to develop advanced avionics. Japanese chipmakers lost their edge to the U.S. as chip tech shifted and processors replaced DRAMs as pivotal products. There never was a Japanese space station.
Japan also is struggling to emerge from a decade-long economic funk. It never quite got around to challenging the U.S. for economic supremacy.
Will China be any different?
"China is making a lot of progress in technology, but they are still primarily a tech follower," said Cliff.
The National Science Foundation in its last weighty report on China's tech capability in 1999 said the country was still slow and backward in tech innovation.
Cliff says a big weakness is that most R&D funding still comes in a heavy-handed way from China's government, rather than Chinese companies. He says this differs from the U.S. where freer investment by industry has been the catalyst for major breakthroughs.
Dean Cheng, analyst with The CNA Corp., a nonprofit researcher in Washington, says the jury's still out on whether China will do better in tech innovation.
"Nobody thought the Japanese lacked the capability, mentality and R&D to take on the U.S. At the end of the day, they didn't devote enough resources. Can the Chinese devote resources and have their efforts pan out? It's very hard to say," Cheng said.
China, to be sure, is a rising tech power, Cheng says. It has scored big coups. Its space program put a manned craft in orbit in October 2003. It has developed nukes and sub-launched missiles.
Chinese scientists are on a par with those anywhere. The nation is pushing hard to become self-sufficient in developing its own tech.
But there are soft spots. Cheng says the Chinese have been weak in software development, though they are strong in hardware.
Other analysts say a lot of Chinese technology is "reverse-engineered" from products bought in advanced countries.
This is where products like computer-driven devices are taken apart and analyzed. The underlying technology is copied and used to make similar products.
The Chinese fighter that collided with a U.S. surveillance plane in January 2001, for example, is a giant version of the MiG-21, an outdated warplane the Chinese got from the Soviets.
Another Chinese approach is dual-use imports. They buy tech from the U.S. like machine tools that can be used to make both civilian and military products. Other machines and computers that run Chinese factories and military facilities were bought off-the-shelf from western countries.
CNA's Cheng says China still suffers from the effects of its bloody Cultural Revolution nearly 40 years ago. At the time, youthful Red Guards loyal to Chinese leader Mao Zedong tried to purge society of so-called counter-revolutionaries.
In the process, Cheng says, they made a shambles of China's education system, killing teachers and shutting schools.
There's a dearth of scientists and other specialists in China today, despite government efforts to graduate millions from Chinese and foreign universities.
"A whole generation was left illiterate," Cheng said. "That generation that didn't go to school is (now) in their 40s, 50s, and 60s. In a western industrial society, those are the (researchers) that would be in their most productive years."
Not everyone says China's weak in technology.
Michael Pillsbury, a respected Pentagon analyst said in a June report that China is making "remarkable achievements" in many areas.
Pillsbury notes China developed a supercomputer in the first half of this year that operates at 11 trillion calculations per second, on a par with some of the fastest. The Chinese also have designed a Pentium-style chip and are working on molecule-sized nanotech devices.
The Pentagon issued a report on Chinese military power on July 19 that showed growing modernization. But the report said part of it was based on weapons buys from Russia, rather than local development.
Cheng and Cliff say China may be a leader in certain tech fields in a decade or two. Its economy of scale, bigger than Japan or Taiwan, makes this possible.
But Cheng has another twist. In the end, he says, the real threat to China's economy isn't its lack of tech innovation, but the threat of political upheaval.
Cheng says China's prosperity is widening the gap between a poor peasantry in the country and a wealthy urban elite.
"Are these peasants going to buy RFID tags and chips? If I was sitting in (the leadership) in Beijing I would be very worried about the potential for social unrest. Only about a quarter of China's population of 1.3 billion have really benefited from the nation's prosperity," he said.
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I have my secret hope that china will trigger a new space race though. Would be fun to se cold war level investments into space tech again 
